Though the US is the world’s biggest oil and natural gas producer, it's not in a position to take care of the whole energy needs of Europe. Russia is the third-largest producer of oil and accounts for up to a third of Europe’s natural gas supplies.
Are the United States and its key European allies united on the issue of the sanctions they have slapped against Russia in the wake of the Ukrainian crisis? Hardly, it seems.
Observers say the US and allies have undoubtedly called for revoking Russia’s “most favoured nation” trade status. They have evicted Russia from the SWIFT payment system. They have also cancelled the operation of online Mastercard, Visa, American Express and Paypal modes of payment in Russia. Russia may even plan to use the Chinese ‘Union Pay” for its online transactions.
But the dominant international public mood is against these sanctions. There are fears that they might lead to war between Russia and the West, causing a human catastrophe the world over. Russian President Vladimir Putin has long made it amply clear that Moscow cannot overlook a possible NATO expansion to Ukraine (and Georgia), the two Black Sea basin states.
There are also apprehensions that the sanctions may result in the shortage of necessary technology supplies to the Russian vessels presently servicing the International Space Station. This 500-tonne multinational ISS structure (involving NASA, Roscosmos, JAXA, ESA, and CSA) is placed in the low Earth orbit. The supply shortage to its Russian segment might lead to its fall on the earth, the effects of which would be disastrous.
Besides, the economic sanctions are hardly in the interest of the United States and its allies. According to a report, in the wake of an invasion of Ukraine by Russia, Americans are paying more than $3.50 a gallon for gas, roughly a dollar more than a year ago. Oil prices have reached the highest since 2014. Gasoline prices have reached their highest level since 2014. Domestic natural gas prices have doubled over the last year.
The United States is no longer a traditional oil importer. New exploration techniques/ shales revolution have changed the scenario to its advantage. In 2014, the United States began exporting oil. In 2016, it started to export liquefied natural gas. The United States is now the world’s biggest oil and natural gas producer. US gas exports to Europe nearly doubled between November 2021 and January this year.
But the United States is still not in a position to take care of the whole energy needs of Europe. Russia is the third-largest producer of oil. It produces one out of every 10 barrels of oil the world consumes. It accounts for up to a third of Europe’s natural gas supplies. Europe gets nearly 40 per cent of its natural gas from Russia only.
The US and allies seem to be very well aware of Russia’s importance in this crucial energy sector. They have so far refrained from slapping sanctions against some of Russia’s biggest banks and energy agencies.
(The author is a New Delhi-based journalist)